Kith Meng, the owner of the Royal Group featured on the cover of Forbes magazine a few years ago.
By Stephen Aldred
Forbes.com
HONG KONG, Nov 27 (Reuters Basis Point) - Standard Bank Asia and Australia and New Zealand Banking Group are arranging a $421 million 18-month bridging loan to back the largest ever merger and acquisition deal in Cambodia, a country where few syndicated loans have ever been done, and most banks do not even have exposure limits.
The loan backs the Royal Group of Cambodia Ltd's acquisition of the Cambodian network operations of its partner, Luxembourg's Millicom International Cellular SA..
Joint coordinating arrangers and bookrunners ANZ and Hong Kong-based Standard Bank are expected to target a mix of bank and non-bank investors due to the limited capacity for deals in Cambodia and the difficulty lenders may have assessing country risk.
The $421 million senior loan pays an all-in 'in the double digits', according to sources familiar with the matter, via a cash coupon, PIK note and front-end fees.
The loan covers both Royal Group's purchase of Millicom's network operations for $346 million, and refinances debt including a $100 million loan arranged by International Finance Corp in 2008.
Cambodia-based investment and development company Royal Group has partnered with global telecoms company Millicom for 14 years. Millicom recently conducted a strategic review of its Southeast Asia assets, and is selling its Cambodian assets to its partner. These consist of 58.4 percent holdings in CamGSM Co Ltd, Royal Telecam International Co Ltd and Cambodia Broadcasting Service Co Ltd.
According to Thomson Reuters LPC data, only eight syndicated loans have been completed in Cambodia, and this deal will be the country's biggest ever corporate deal. The most recent loan was the $100 million two-tranche IFC loan for CamGSM led by International Finance Corp which was completed in July 2008. The loan was to upgrade and expand the company's cellular network.
(Editing by Lincoln Feast)
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